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“It it is our belief that over time we will demonstrate to the community that the coal seam gas industry is low-impact, safe, clean and can co-exist alongside farming, wine-making and other agricultural industries," AGL said in a statement.

Community groups are not so sure. The Hunter Valley Protection Alliance is lobbying the state government to declare parts of the Hunter off limits to gas extraction.

They fear the presence of gas wells will damage the wine and tourism industry, while also threatening productive grazing land and groundwater supplies.

Clarke, who died of cancer in April, was a fierce critic of AGL and a financial backer of groups opposing coal seam gas exploration.

AGL argues that wine and gas can exist together. But some of its competitors privately worry that pursuing coal seam gas projects in substantially populated areas could damage support for the entire industry.

The reaction from those in the Hunter has certainly been noisy. Two weeks ago, about 300 people staged a protest at the front gate of Pooles Rock as reports of its sale to AGL emerged.

“The purchase of Pooles Rock was a destabilising tactic by AGL designed to create panic," says Stuart Ewen, a property industry veteran and leading member of the Hunter Valley Protection Alliance.

“Some people will wrongly believe that if they don’t sell now, the value of their property could be wiped out." Ewen, a former NSW president of the Property Council of Australia, says AGL is making strategic land purchases around the Broke area as many locals have denied the company access to their properties.

“They can’t negotiate the land access agreements so they have gone ahead and bought the land," he says. “If they own a lot of land they will attempt to put pressure on the NSW government to grant them approval [to explore and process gas]."

Late last week, AGL also settled on the Yellow Rock Estate, which adjoins Clarke’s former property.

As a condition of sale, the company agreed to preserve any buildings or items of heritage value on Yellow Rock and to consult a landscape architect to “ensure future operations do not interfere with the visual amenity of the local area".

In the case of Pooles Rock, the company agreed to continue operating the 35-hectare chardonnay vineyard. “The sale would go against every wish David Clarke would have had," says Ewen. “It is being viewed as highly provocative."

The sale was negotiated by well-known insolvency expert Ian Ferrier, who is the executor of Clarke’s will. He did not return calls.

AGL has plenty at stake in both its Gloucester and Hunter gas projects.

Its exploration licences in the Hunter were purchased as part of a $171 million takeover of Sydney Gas in late 2008. At the time, its two Hunter exploration licences were valued at $115 million. And at the same time, it paid $370 million for an exploration licence near Gloucester owned by the AJ Lucas Group and Molopo Australia.

Community groups around Gloucester, a tourist and farming town, are equally fierce in their opposition to AGL. The company won conditional approval for 330 gas wells from the NSW government, but the approval was challenged last week in the Land and Environment Court. A decision on the judicial appeal is expected early next year.

Land title searches indicate AGL has five properties around Gloucester, but the company could require more holdings if locals harden their resolve.

The chairman of the Barrington-Gloucester-Stroud Preservation Alliance, Graeme Healy, says AGL is expected to begin negotiating land access agreements early next year if the court throws out the appeal. “They will be hoping to convince people to grant them access by paying large rental fees," he says.

But if this fails, the company may have to purchase more land. There is already strong demand for land in the area due to coalmining.

The Australian Securities Exchange-listed
Gloucester Coal
owns about 30 properties in the area, according to its environmental assessment documents, while Gloucester Resources owns another five.